Proppants are silica sand and ceramic beads that are used to stimulate oil and gas wells. The process of utilizing proppants in wells is done to increase the well performance. The industry typically uses over 50 million tons of proppant annually. The products are typically processed and/or manufactured at a large production facility. The finished products are typically shipped by rail to transload sites where the proppants are stored and loaded to truck for transportation to the well site.
A typical transload is a site with rail track and storage silos used to off load proppant materials from the railcar. Proppants are transported in rail hopper cars from the production facilities to these transload sites and either off loaded to tanks or stored in the hopper car itself until sold. A common problem with storing proppant in hopper cars is that the car utilization for transport is lost, and depending on location, rail demurrage charges can accumulate. Demurrage can accumulate to millions of dollars annually.
Another problem that has developed in the industry is congestion at the transload sites which sometimes causes an embargo by the servicing railroads. Also, proppant storage is limited to areas with the typical needed infrastructure.
Further, the industry transloading process can be problematic in that infrastructures are typically large and permanent. Currently, hopper railroad cars are pulled into the processing plant and loaded through the top. The railcars then go to a transload site. The transload sites have yards with rail track and large storage tanks, and the railcars are emptied into the tanks. The empty railcars are pulled out and sent back to the plant. Typically, there's not enough tank storage at the transload site to hold all of the proppant, such as sand, so it is typically stored in the railcar. Some of the railcars may sit on the track for significant lengths of time, incurring significant costs for the supplier.
Further, hydraulic fracturing, or “frac” wells are becoming much larger and have more volume per well when compared with prior wells, necessitating railcars for storage. This fills up all the railroad track, resulting in railroad embargos on track, thus resulting in lost sales.
In another aspect, most conventional container systems used in the oil and gas industry are in the 12 to 23 ton range. This is generally the maximum capacity of a conventional steel transport system because the total weight of the system and material has to stay within legal road haul limits.